A neo-regulation strategy is currently sweeping across the global business geography. Its essence is in the morale that for a regulator to earn its stay, it must evolve empathy towards ensuring that its charges have enough oxygen for sustenance, which it somehow provides; because the survival of those charges/patrons, in turn, fuels the regulator’s longevity and relevance.
The axiom played out recently when the Corporate Affairs Commission (CAC) unveiled its new Business Rescue Advisory Committee; charged with guiding ailing companies on restructuring and repositioning. While this may ordinarily appear contra-mandate on the part of the CAC as a regulator – due to the newness of the policy in Nigeria, its usefulness is in its win-win end – for the regulator and the regulated; because in all reasonableness, it is a downright proactive empathy!
What’s more, it has worked in other climes like the USA. For instance, during the George W. Bush presidency, America’s Federal Communications Commission (FCC) under Michael Powell’s chairmanship, commenced from 2002, extension of significant empathy to companies under its regulation (with primary focus on the airwaves and general broadcast sector) in form of free advisory services towards boosting their profitability.
In line with best global norms, the CAC’s business rescue concept is quite different from, but still complimentary to, the usual striking off of the names of dormant companies from the Register of companies as provided for in section 525 of the Companies and Allied Matters Act CAP C20 Laws of the Federation [2004] which allows for the removal of inactive companies from the data base. So, the new CAC’s business rescue is a second chance availed a company that would otherwise have been liquidated. The import of this is that no longer would the management of CAC strike a company off the register without first encouraging it to take advantage of the free business rescue advisory services; in the huge hope of salvaging it from continuous lethargy through the process.
It is perhaps, an appurtenance of the so called developing world; but it dates back to the early 1970s – a decade after most African countries gained independence from Euro-America’s colonialism. From about the said period, management researchers and practitioners outside the continent started decrying noticeable defaults in the constitution and operations of indigenous government-owned businesses.
While private businesses thrive to the joy of their founders, government businesses stunt at the expense of the masses, due largely to the insensitivity of government regulatory policies; which in turn translate to their historical inefficiency. It is perhaps in a bid to excuse this perennial drawback of government agencies [producing as well as regulating], that some social theorists adduce that ‘’government has no business with business.’’
Among the first crusaders against endemic statics in African public corporations is the South African-born Peter O’toole, then professor of public management at the University of Bloomington, USA. Concerted clamour for the resolution of the ugly trend eventually produced such public management eggheads like the now Prof. Pat Utomi and some of his colleagues, who upon enrolling for graduate programmes, opted for business. But under the mentorship of O’toole, the scholars/researchers were tutored on their Continent’s dire need of good managers of governments’ businesses; and that was how and why most of them ended up specializing in public management [public administration – as alternate dissertation in some other universities].
To be sure, the essence of exemplary regulation of businesses in any ramification is that it prises out profit and security from the regulated to fund the growing obligations of government. This is why most government-regulatory agencies are meant to be revenue generating and for that matter, self-sustaining. It then goes without saying that managers of such regulating concerns must be creative and firm in order to inculcate sustainable faith in the psyche of the citizenry. For this to happen, they must be strictly business-like; eschewing emotional frivolities and unethical tendencies while dealing with the clientele.
Back to the innovations at the CAC, the communiqué bearing the pro-company development said, ‘’The Committee is to render free advisory services to prevent unnecessary liquidation of companies through its multi-competencies in such professions as Law, Finance, Audit, Human Resource, Communication, Technology, Business Management, et cetera. The Company Rescue Committee is constituted in such a way as to extend expert advice in divergent fields to companies that voluntarily indicate their interest to go through the .process’’. And many have applauded the Corporate Affairs Commission for this unexpected corporate social responsibility, saying it is a strategic, proactive step toward discharging its mandate in line with globally prescribed insolvency management.
Mr Hrysir Nana-Addo, an official of the Ghanaian committee of the African Business Roundtable was in Nigeria recently to consult for a group of his compatriots who own businesses in Nigeria. Amid discourses on survival techniques, Nana-Addo said regarding the CAC’s business rescue scheme: ‘’ The Commission, by setting up the Rescue Committee, has extended to you a profound lifeline any business operator would ever ask for. Take the chance therefore – especially because it is free of charge.; and who knows, you probably wouldn’t be using the services of people like me any longer’’.
On her part, an Abuja-based female executive of the Manufacturers’ Association of Nigeria [MAN] who pleaded anonymity while reacting to the development on telephone, extoled the CAC for what she termed ‘the ingenuity of the Commission’s management’ and concluded, ‘’from now on, several struggling companies – especially those under MAN membership, are expected to rebound by leveraging on the new service. And by my envisagement, if any of them folds up now, it would be more an act of suicide than murder.’’
Many respondents within the Commission’s Headquarters on the new BRS are full of praise for it. For them, this initiative has indeed earned for CAC thumb-ups.
To the millions of CAC watchers, Mahmud Bello is the midwife and nurse of Nigeria’s contemporary business regulation – intent on enthroning flexible processes that may inject sustainable free enterprise into the nation’s economy. With its recent regime of creative advisory services, the Commission has assumed a proactive clinical prevention of crises in the superintendence of companies under its mandate. This reform promises to breathe life into the souls of local businesses –especially now that government’s attention is set at diversifying the nation’s economy through innovative empowerment of SMEs.
The coming of the new policy has reemphasized CAC’s commitment to sustainable business environment and as a result, there is now a general feeling of satisfaction among the patrons. What this means is that while the policy of striking out any dormant company from the Register of companies by CAC still stands, the Commission would do so only after it has duly exhausted the Business-Rescue grace extendable and still finds that in spite of all, declaration of liquidation and ultimate delisting of same is inevitable – based on undeniable traits of dormancy therein.
To the apparently relieved business-owners, this is a balanced management that merits commendation. Even the Commission as a corporate body submits that much as its position paper on the development further explains, ‘’ ‘Business Rescue’ is a concept that allows for suspension of bankruptcy proceedings and the appointment of a Business Rescue practitioner whose primary responsibility is to resuscitate the company he may be advising.
It is pertinent to emphasise that while this laudable liberality of [the]CAC is completely free, it is limited to expert advisory services only, and does not include bail-out. Participation is voluntary – not forcible, and extendable only to those companies that can be traced in the CAC Register.
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